Versus Khalid Mahmud, D.R. and Ali Ehsan , Waheed Shahzad
ZAFAR UL MAJEED, MEMBER (TECHNICAL).--- This appeal has been filed by the Collector, Collectorate of Sales Tax and Central Excise, Lahore against Order-in-Original No.91 of 2004 dated 3-11-2004 passed by the Additional Collector-III, (Adjudication), Lahore.
2. The facts giving rise to this appeal are that the staff of Sales Tax Collectorate, Lahore audited the sales tax record of Messrs Imran Pipe Mills (Pvt.) Ltd., Lahore (the respondent herein) for the period July, 1998 to June, 2000 and reported that the respondent was maintaining double record i.e. one for sales tax purpose and one for private purpose; suppressed sales through manipulation of record and, as such, evaded sales tax amounting to Rs.88,43,383. According to the department, the respondent did not show purchases of H.R. Coils made from un registered persons and production of M.S. Pipes therefrom in its record with a view to evading sales tax. The private record was reportedly resumed by the staff and a contravention case made out against the respondent for committing tax fraud within the meanings of section 2(37) of the Sales Tax Act, 1990 besides violation of the provisions of sections 3, 3A, 6, 7, 22 and 23 ibid. The case was adjudicated by the Additional Collector (Adjudication), Lahore vide impugned order whereby show cause notice was vacated on the ground that the department failed to produce the private record statedly resumed from the respondent's premises and, thus, failed to prove the charge of tax fraud against it.
3. Through the instant appeal, the department has challenged the impugned order on the ground that the required record could not be produced before the adjudicating officer as the same had been mis-placed during shifting of Collectorate's office from Shadman to Sales Tax House, Fade Road, Lahore and that the said record has now been traced out and attached with the appeal.
4. Learned counsel for the respondent vehemently opposed the appeal pleading that the respondent did not maintain any private duplicate record nor the same was resumed by the sales tax staff from its premises as was evident from the fact that the department, despite repeated demands by the adjudicating officer, failed to produce any such record before him. Learned D.R. at this stage stated that he had received copies of the private record from the department, which was produced before us and seen by the respondent's counsel. Learned counsel for the respondent denied authenticity of the record produced and also objected to maintainability of the appeal on the ground that the same was not signed by the Collector himself.
5. We have gone through the facts on record and heard the parties. The emergent position is that the entire case of the department is based on some private record statedly resumed from the respondent's premises during the course of audit which the department failed to produce before the adjudicating officer despite several opportunities given. As a result, their case failed and the charges against the respondent were withdrawn. We have also observed that in the memo. of appeal, it has been stated that the record had been traced out and attached with the appeal but actually no record has been attached with the appeal. During the course of hearing on 18-6-2007, learned D.R. produced photocopies of certain record which showed only some names, quantities and dates but no material particulars to support the department's case. The respondent's counsel denied any such record maintained by the respondent and stated that the same was cooked up by the department as an afterthought to mislead the Court. We have seen the contents of the record, which mentions only quantities in Kgs, dates and name without any details regarding description of goods, addresses etc. and, therefore, do not establish any link with the department' s case. To a question whether the department conducted any investigation with reference to the contents of this record, before instituting a case of tax fraud/evasion against the respondent, learned D.R. replied in the negative.
6. After considering all aspects of the case, we find that the appellant Collectorate has failed to establish the charges of tax fraud, suppression of sales and resultant tax evasion against the respondent by any cogent evidence. The impugned order is accordingly upheld and the appeal is rejected being without merit.
H.B.T./137/Tax (Trib.) Appeal rejected.